Worldwide Depression

American Depression RECAP  October 29, 1929  stock market crashes on Black Tuesday  businesses, investors, people (who didn’t invest), & banks all suffered

American Depression New Deal  created jobs  spent more money on welfare & other relief  regulated banking & stock market Smoot-Hawley Tariff Act (1930)  heavy taxes on goods imported into US  encouraged buying American goods

British Bumbling Britain is also out of $$ after WWI They have another major problem: their machinery and factories are outdated What does this mean? Answer: They struggle to compete with newer U.S. and Japanese technology and become a poorer country Poor technology + protectionism (tariffs) = damaged British trade

British Bumbling British workers suffered after the war as disarmament left many factory workers without jobs What is disarmament? Answer: When a country no longer makes weapons for wartime By 1921, almost 25% of Britain was unemployed Labor unrest takes place: labor unions want high wages and employment rates of war years; industry leaders did not (said they could not)

A Man Named Ramsey to the Rescue… Ramsay MacDonald was the leader of the Labour Party and spoke out for the workers, but they did not have a majority in the House of Commons MacDonald formed a coalition gov’t with the Liberal Party (which means both political parties worked together) This gov’t set a tight budget Protected Brits from foreign competition Helped construction industry All of these measures helped the economy recover

Great Britain 1926  workers upset  general strike: strike involving all or a large number of a nation’s workers Parliament passed Trade Disputes Act (1927)  made general strikes illegal

Great Britain late 1920s  still paying back debts to US had high interest rates, causing spending to decrease & unemployment industrial areas were more affected unemployment = 2.5M by end of 1930

France WWI destroyed farmland, forests, villages, & cities and casualties were numerous  Half of all males were killed during war government = bankrupt after war factories, railways, & canals couldn’t be rebuilt

France unemployment = high  led to civil unrest initial impact of Great Depression got worse

Germany paying back reparations for WWI  as Treaty of Versailles ordered faced severe inflation  money was practically worthless

INFLATION!! If you print more money than the amount of gold you have, the money becomes less valuable Hyperinflation  government prints more money  businesses raise prices  government prints more money  businesses raise prices  etc.  eventually money becomes worthless

Canada hit hard in the late 1920s about 30% of workforce unemployed by later 1930s unemployment rate was around 12% until WWII

Australia wages decreased by 1931, unemployment was about 32%

South America US had been heavily invested in South American economies Chile, Bolivia, & Peru were especially hurt by depression